Adjacent to Hyde Park in Thorney Court, it was there I had a rooftop discussion with Cheval director George Westwell about the company’s evolution and future.
Some 35 years have passed since Cheval Residences opened for business and, in that time, the serviced apartment sector in which it operates has grown significantly. In fact, travel overall has changed massively, with the likes of sharing economy arrivals like Airbnb and Love Home Swap, as well as miscellaneous hotel options open to consumers.
Embracing the outdoor space that the stunning penthouse had to offer, Westwell and I sat on the patio as we discussed the past, present and future of Cheval and the travel market.
“The sector has changed massively. When I entered, pub landlords had realised they could put rooms on the properties; then we started building motels, low level and low cost buildings on A-roads; then it was the five-star space,” recalled Westwell.
“When hotel companies owned their properties, there was passion about service and quality – then they all become beholden to shareholders and sold to banks to operate them on long-term leases. But banks don’t want to invest the same way as someone who owns them.”
He went on to note how the four-star market was also a rising star, though it’s now been compressed with the surge of budget hotels like Premier Inn and Travelodge. In fact, we’ve even seen the likes of Travelodge introduce business-centric upgrades to attract leaders.
“Hoteliers have not embraced Airbnb, they’ve cursed them and criticised them and been reluctant to change,” he continued.
Looking at the likes of Marriott, which has around 30 various brands, Westwell questioned the logic behind that and how consumers are supposed to understand the difference. He suggested the same rules apply to Hilton and its miscellaneous brands, such as Doubletree.
“People should bring simplicity back and have three brands max – five star, four star and three star, or millennial, budget, boutique. There’s a need for people to wake up and have simplicity,” he said.
For Cheval, simplicity certainly seems to be the case. A private company operating out of Jersey, the company’s bread and butter are wealthy tourists.
“We have a lot of leisure guests; people who are of high net worth. They come to London and want to have a nice, safe, secure location. That opens a lot of areas for us, the US, GCC countries, Australia and lots of little markets in between,” detailed Westwell.
“With Brazil and Australia, people never come for two days, it’s always a week or two, so when you target people who come from far away, they’ll stay a long time. Other guests are what I call admirals of industry; the chief execs of companies.”
After 14 years at Cheval, Westwell has seen the company’s own transition from one that was geared on long-term stays of at least three months – something enforced through planning and council legislation – which the business has now successfully flipped on its head.
While it was once 70 per cent of guests staying for at least 90 days, that’s now 30 per cent, with 70 per cent on shorter stays, which has been achieved after years of negotiations.
He was keen to explain that the business isn’t into investments and scale for the sake of it. Instead, Cheval takes time and makes opportunistic investments for its luxury-seeking clientele.
“When I joined we had 286 apartments and now have 509. We offer people good locations, with sizes from 47 square metres to 350 square metres for circa £1,000 to £7,000 a week, delivering traditional and contemporary designs,” said Westwell.
“We’re more about opportune things that come up rather than saying we want to be north of Hyde Park etc. But now we’re a well-known brand, we’ve had people who have stayed with us call and say, ‘can you bring your product here?’ Here has been Bahrain, Ukraine, places as far afield as that.”
A trip to the Serviced Apartment Summit in Dubai three years ago turned out to be particularly fruitful, as Cheval showcased its resources, which would provide knowledge, design and operational skills for anyone interested in tying up commercially.
“People have these assets that they want us to run for them and we do that under a hotel management agreement. They own the asset, they employ the people that will run it, but we direct, supervise, train, and help them through the process, and the building will be branded as a Cheval.”
Detailing its reputation further, Westwell said that the business is recognised for its five-star service, measuring itself against guest experience tracker Review Pro, mystery shoppers and five-star hotels – something he said “no other serviced apartment does”.
Stepping away from its five-star roots, but still leveraging that customer satisfaction awareness, the next move for growth for Cheval will be in the aparthotel space.
“We’re developing an aparthotel brand. Rooms will be smaller, more like 29-39 square metres, and the quality of the finish will look the same, but rather than granite, it will have manmade stone, so will feel a bit different,” he detailed.
“Then we’re looking at the millennial concept. This is where room sizes are decreasing, but communal area sizes are increasing – so people will work and engage in them, which means plenty of plugs, high-speed WiFi, beer and coffee. We’re talking to number of people about those concepts.”
Building on his earlier comments about Airbnb getting shunned by hotels, Westwell welcomes the firm with open arms.
“I think with the advent of Airbnb, they’ve created this mindset that there’s an alternative to hotels, and people are coming across serviced apartments, discovering them and trying them. The percentage growth of serviced apartments in the UK outstrips the percentage growth of hotels by four to one – though hotels of course have a bigger base,” he opined.
Closing with final thoughts, Westwell added: “I think the consumer is moving away from opulence to experiential; that’s very true of millennials and high net worths, who want to see more pampering, spas and whatever else. It’s about really introducing entrepreneurial creativity.”[rb_inline_related]